Wholesale Price Negotiations?

8 Replies

Hello,

I am going to take a look at the house tomorrow offered by wholesaler and I am wondering if it is normal to negotiate the purchase price? never bought a house from wholesaler so I am not sure what is the norm in this situation.

thank you

Peter

Hey Peter,

You can negotiate the price.  However, don't expect too much.  The wholesaler could only be making $2,000.  Although, he could also be making $20,000.  I'd say don't focus so much on what the wholesaler is making.  Just run your numbers and if it works for you go for it..........good luck!

Originally posted by @Roland Paicely :

Hey Peter,

You can negotiate the price.  However, don't expect too much.  The wholesaler could only be making $2,000.  Although, he could also be making $20,000.  I'd say don't focus so much on what the wholesaler is making.  Just run your numbers and if it works for you go for it..........good luck!

 Totally agree, offer what you can.  If they are any good they has a lot more buyers looking at it than just you.

As long as you know your MPP(Max Purchase Price), then it shouldn't be a big deal. There might be a little wiggle room to negotiate, but if you stay under your MPP, no need to be greedy. There is plenty of profit out there for everyone.

Well, most likely they aren't closing and then selling to you. That means they are assigning either an option or a sale contract. 

I'd tell them I don't buy contracts that I haven't read. They will have you sign docs to "protect" themselves, but they are pretty much horsefeathers. 

Read the contract, then you will know what they are trying to get. The value they bring is basically the same as a Realtor, unless they actually worked on the place which most don't. You can then offer a reasonable fee. If they knew how to take title then they could go to that $20,000 profit, but if they don't, they are simply facilitating a sale which carries a lower value for services rendered. 

As mentioned too, if their price is reasonable, fits your needs, you intend to use them again, then you don't want to be hammering them. They may or may not have other buyers, just play your cards and don't worry about others. :) 

Dont make a mistake thinking to had you may be walking away from a great deal....Focus on one thing...how much money you will be making..

Prime example, i have a buyer that can care less about what im charging for the property he only cares about his bottom line...I use to hide my wholesale prices from him through a double close, but after 1 year, with 16 deals under ur belt, we just do an assignment now everytime, and ive gotten upwards of 40k on just one deal...because he made 4 times that...

Hes a multi millionaire and he taught me to focus on the bottom line, all the rest is rubbish...this about making money

thank you everybody for all your great points.

like many of you said, i should worry about my bottom line, max offer price, minimum profit or whatever else we can call it.

also great point Bill not to hammer the wholesaler too much if i plan to work with them again, which i do.

in my case there is a reason to negotiate little lower price. their listing was slightly different from the reality when it comes to the tenant at the property. 

it seemed originally that the tenant was leaving at the end of November and could stay for longer for $1,000/month if we wanted, but the reality is that the tenant has lease until end of February and only for $500/month

i discuss this part on bigger pockets under "how to remove a tenant with existing lease"

thank you again